The energy-dependence of intracellular protein breakdown has been recognized for a long time, but the biochemical mechanisms of this process remained unknown. We are investigating the mechanisms of protein breakdown in an ATP-dependent proteolytic system from reticulocytes. The system has been resolved into several essentially required components. One of these, a heat-stable polypeptide designated as APF-1 (ATP-dependent Proteolysis Factor 1) becomes conjugated to proteins in an ATP-requiring reaction. The polypeptide appears to be identical with ubiquitin, a universally occurring polypeptide of unknown function. The present work examines the role of the conjugation of ubiquitin with proteins in protein breakdown, by delineating the enzymatic processes carrying out the formation and the breakdown of ubiquitin-protein conjugates.